1. Using the information provided above, compute the net cash flow provided by (used in) operating, investing and financing activities using the indirect method.

2. Prepare a cash flow statement for the year ended December 31, Year 2

STATEMENT OF CASH FLOWS (INDIRECT METHOD) The Group, Inc. Consolidated Balance Sheets (in thousands) Dec. 31, Dec. 31, Year 2 Year 1 ASSETS Current assets: Cash and cash equivalents $ 92,062 $ 72,634 Accounts receivables, net 55,947 75,492 Inventories 50,784 53,129 Prepaid expenses 12,112 13.057 Total current assets 210,912 214,312 Equipment 145,444 134,312 Less: Accumulated depreciation (50,515) (36,689) Total assets $305,841 $311.935 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 25,466 $ 34,879 Accrued liabilities 40,574 40.722 Total current liabilities 66,040 75.601 Long-term debt 10,422 10.206 Stockholders' equity: Contributed capital 1,662 1,284 Retained earnings 227.717 224,844 Total stockholders' equity 229,379 226.128 Total liabilities and stockholders' equity $305.841 $311.935 Consolidated Statement of Income (in thousands) Year 2 Net sales $130,896 Cost of sales 74.040 Gross profit 56,856 Operating expenses: Selling, general & administrative expenses 33,211 Depreciation expense 13,826 Total operating expenses 47,037 Operating income 9,819 Interest income 239 Income before income taxes 10,058 Income tax expense 3,621 Net income $ 6,437 The Group, Inc. did not sell any equipment or repay any borrowings during the year ended December 31, Year 2. The company declared and paid dividends in the amount of $3,564 during the year ended December 31, Year 2. Homework Assignment: Year 1 STATEMENT OF CASH FLOWS (INDIRECT METHOD) The Group, Inc. Consolidated Balance Sheets (in thousands) Dec. 31, Dec. 31, Year 2 ASSETS Current assets: Cash and cash equivalents 02.069 S72634 Accounts receivables, net 55,947 75,492 Inventories 50,784 53,129 Prepaid expenses 12.112 13.057 Total current assets 210,912 214,312 Equipment 145,444 134,312 Less: Accumulated depreciation (50.515) (36.689) Total aggets 105.84 $311.935 1. Using the information provided above, compute the net cash flow provided by (used in) operating, investing and financing activities using the indirect method 2. Prepare a cash flow statement for the year ended December 31, Year 2. LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable Accrued liabilities Total current liabilities Long-term debt Stockholders' equity: Contributed capital Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 25.466 40,574 66,040 10.422 34 870 40.722 75.601 10.206 1,662 227,717 229.379 5305.841 1.284 224,844 226,128 $311.935 Consolidated Statement of Income (in thousands) Year 2 $130,896 74.040 56.856 Net sales Cost of sales Gross profit Operating expenses: Selling, general & administrative expenses Depreciation expense Total operating expenses Operating income Interest income Income before income taxes Income tax expense Net income 33,211 13.826 47,037 9,819 239 10,058 3.621 96.437